Research Shows Brazil’s Major Cities Need a Total Investment of R$ 330 Billion (US$ 199 Billion) by 2025
Added to the fact that 84 percent of Brazil’s population already live in urbanised regions, the importance of improving infrastructure is paramount to securing what has been a healthy level of economic growth in recent years. Yet an analysis in conjunction with Urban Systems and PricewaterhouseCoopers (PwC), examining existing and projecting future works, demonstrated that a considerable amount still needs to be undertaken. The research concluded that a total of R$ 330 billion (US$ 198 billion) of investment will be necessary to bring Brazil’s cities in line with developed economies of the world by 2025:
SÃO PAULO
Metro
Current line amount: 65
Lines required to be constructed (in order to have a system similar to what exists in Seoul, Korea): 238
Investment required: R$ 71.4 billion
Buses
Current routes in existence: 301
Routes required to be created (in order to have a system proportional to the number of habitants): 700
Investment required: R$ 14 billion
Airports
Current occupation of the capacity installed: 163%
Investment required in order to operate at 80% of installed capacity: R$ 4.6 billion
Sanitation
Current population reached: 89%
Current sewage being treated: 68%
Investment required (to universalise the service): R$ 1.9 billion
Telecommunications
Current penetration of internet connection (number of people with access per 100 habitants): 12
Investment required to have a penetration level similar to the United States: R$ 6.8 billion
Energy Distribution
Current technical losses: 7%
Current losses as a result of illegal energy network usage: 5%
Investment required to install an intelligent distribution network: R$ 6.7 billion
Total investment required = R$ 105.4 billion
RIO DE JANEIRO
Metro
Current line amount: 41
Lines required to be constructed (in order to have a system similar to what exists in Seoul, Korea): 130
Investment required: R$ 39 billion
Buses
Current routes in existence: 24
Routes required to be created (in order to have a system proportional to the number of habitants): 400
Investment required: R$ 8 billion
Airports
Current occupation of the capacity installed: 82%
Investment required in order to operate at 80% of installed capacity: R$ 500 million
Sanitation
Current population reached: 82%
Current sewage being treated: 48%
Investment required (to universalise the service): R$ 1.8 billion
Telecommunications
Current penetration of internet connection (number of people with access per 100 habitants): 9
Investment required to have a penetration level similar to the United States: R$ 3.9 billion
Energy Distribution
Current technical losses: 7%
Current losses as a result of illegal energy network usage: 15%
Investment required to install an intelligent distribution network: R$ 4.7 billion
Total investment required = R$ 57.9 billion
SALVADOR
Metro
Current line amount: 14
Lines required to be constructed (in order to have a system similar to what exists in Seoul, Korea): 59
Investment required: R$ 17.7 billion
Buses
Current routes in existence: 0
Routes required to be created (in order to have a system proportional to the number of habitants): 100
Investment required: R$ 2 billion
Airports
Current occupation of the capacity installed: 126%
Investment required in order to operate at 80% of installed capacity: R$ 880 million
Sanitation
Current population reached: 66%
Current sewage being treated: 99%
Investment required (to universalise the service): R$ 1.1 billion
Telecommunications
Current penetration of internet connection (number of people with access per 100 habitants): 4
Investment required to have a penetration level similar to the United States: R$ 940 million
Energy Distribution
Current technical losses: 10%
Current losses as a result of illegal energy network usage: 2%
Investment required to install an intelligent distribution network: R$ 5.6 billion
Total investment required = R$ 28.2 billion
BRASÍLIA
Metro
Current line amount: 42
Lines required to be constructed (in order to have a system similar to what exists in Seoul, Korea): 27
Investment required: R$ 8.1 billion
Buses
Current routes in existence: 0
Routes required to be created (in order to have a system proportional to the number of habitants): 100
Investment required: R$ 2 billion
Airports
Current occupation of the capacity installed: 157%
Investment required in order to operate at 80% of installed capacity: R$ 2 billion
Sanitation
Current population reached: 92%
Current sewage being treated: 70%
Investment required (to universalise the service): R$ 657 million
Telecommunications
Current penetration of internet connection (number of people with access per 100 habitants): 9
Investment required to have a penetration level similar to the United States: R$ 1.6 billion
Energy Distribution
Current technical losses: 9%
Current losses as a result of illegal energy network usage: 3%
Investment required to install an intelligent distribution network: R$ 1.2 billion
Total investment required = R$ 15.6 billion
FORTALEZA
Metro
Current line amount: 0
Lines required to be constructed (in order to have a system similar to what exists in Seoul, Korea): 66
Investment required: R$ 19.8 billion
Buses
Current routes in existence: 0
Routes required to be created (in order to have a system proportional to the number of habitants): 200
Investment required: R$ 4 billion
Airports
Current occupation of the capacity installed: 82%
Investment required in order to operate at 80% of installed capacity: R$ 400 million
Sanitation
Current population reached: 46%
Current sewage being treated: 68%
Investment required (to universalise the service): R$ 2.6 billion
Telecommunications
Current penetration of internet connection (number of people with access per 100 habitants): 4
Investment required to have a penetration level similar to the United States: R$ 1.3 billion
Energy Distribution
Current technical losses: 7%
Current losses as a result of illegal energy network usage: 5%
Investment required to install an intelligent distribution network: R$ 3.4 billion
Total investment required = R$ 31.5 billion
BELO HORIZONTE
Metro
Current line amount: 28
Lines required to be constructed (in order to have a system similar to what exists in Seoul, Korea): 36
Investment required: R$ 10.8 billion
Buses
Current routes in existence: 0
Routes required to be created (in order to have a system proportional to the number of habitants): 150
Investment required: R$ 3 billion
Airports
Current occupation of the capacity installed: 145%
Investment required in order to operate at 80% of installed capacity: R$ 1.5 billion
Sanitation
Current population reached: 98%
Current sewage being treated: 58%
Telecommunications
Current penetration of internet connection (number of people with access per 100 habitants): 11
Investment required to have a penetration level similar to the United States: R$ 1.1 billion
Energy Distribution
Current technical losses: 5%
Current losses as a result of illegal energy network usage: 2%
Investment required to install an intelligent distribution network: R$ 7.7 billion
Total investment required = R$ 24.1 billion
MANAUS
Metro
Current line amount: 0
Lines required to be constructed (in order to have a system similar to what exists in Seoul, Korea): 49
Investment required: R$ 14.7 billion
Buses
Current routes in existence: 0
Routes required to be created (in order to have a system proportional to the number of habitants): 100
Investment required: R$ 2 billion
Airports
Current occupation of the capacity installed: 149%
Investment required in order to operate at 80% of installed capacity: R$ 400 million
Sanitation
Current population reached: 11%
Current sewage being treated: 23%
Investment required (to universalise the service): R$ 3.5 billion
Telecommunications
Current penetration of internet connection (number of people with access per 100 habitants): 2
Investment required to have a penetration level similar to the United States: R$ 1.5 billion
Energy Distribution
Current technical losses: 9%
Current losses as a result of illegal energy network usage: 30%
Investment required to install an intelligent distribution network: R$ 1.2 billion
Total investment required = R$ 23.3 billion
RECIFE
Metro
Current line amount: 66
Lines required to be constructed (in order to have a system similar to what exists in Seoul, Korea): 68
Investment required: R$ 20.4 billion
Buses
Current routes in existence: 0
Routes required to be created (in order to have a system proportional to the number of habitants): 150
Investment required: R$ 3 billion
Airports
Current occupation of the capacity installed: 66%
Investment required in order to operate at 80% of installed capacity: R$ 220 million
Sanitation
Current population reached: 37%
Current sewage being treated: 64%
Investment required (to universalise the service): R$ 1.9 billion
Telecommunications
Current penetration of internet connection (number of people with access per 100 habitants): 5
Investment required to have a penetration level similar to the United States: R$ 800 million
Energy Distribution
Current technical losses: 9%
Current losses as a result of illegal energy network usage: 7%
Investment required to install an intelligent distribution network: R$ 3.5 billion
Total investment required = R$ 29.8 billion
PORTO ALEGRE
Metro
Current line amount: 34
Lines required to be constructed (in order to have a system similar to what exists in Seoul, Korea): 25
Investment required: R$ 7.5 billion
Buses
Current routes in existence: 43
Routes required to be created (in order to have a system proportional to the number of habitants): 150
Investment required: R$ 3 billion
Airports
Current occupation of the capacity installed: 109%
Investment required in order to operate at 80% of installed capacity: R$ 950 million
Sanitation
Current population reached: 85%
Current sewage being treated: 16%
Investment required (to universalise the service): R$ 317 million
Telecommunications
Current penetration of internet connection (number of people with access per 100 habitants): 11
Investment required to have a penetration level similar to the United States: R$ 700 million
Energy Distribution
Current technical losses: 6%
Current losses as a result of illegal energy network usage: 9%
Investment required to install an intelligent distribution network: R$ 1.5 billion
Total investment required = R$ 13.9 billion
In São Paulo, which PwC have previously estimated will be the 5th largest city economy in the world by 2025, 1 million people do not have access to adequate sanitation. Other major noticeable issues include the massive rush hour traffic jams and the problems the city faces when heavy rain falls. From a national perspective, as highlighted in our recent post on World Cup 2014 infrastructure delays, the majority of the country’s airports operate above capacity and there also is a vital need to improve the country’s highway system (although some reforms are underway funded under the Growth Acceleration Programme or PAC). Other much needed reformations include the improvement of electricity networks which remain insufficiently controlled (although a new sophisticated system is being installed – known as ‘the smart grid’ – in some of the larger cities) as well as the need to increase the spread of 4G internet connectivity (only 11% of cell phones in São Paulo have access to 3G).
Much of the future progress will rely on the active cooperation of the public and private sector to push viable projects beyond the idea stage. According to George Martine, urban planning consultant for the United Nations in an interview with the EXAME magazine: ‘Brazilian cities are growing without adequate planning – replicating the same problems that occurred 50 years ago: inefficient public transport, a lack of basic sanitation, periphery favelisation amongst others. The public management sector needs to understand that the cities are going to continue to grow and its responsibility is to prepare for what will be ever increasing populations.’
